IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV JUDICIAL MEMBER AND SHRI BR BASKARAN ACCOUNTANT MEMBER MA NOS. 133 TO 138 /VIZAG/ 20 10 (ARISING OUT OF ITA NOS.415 TO 417 & 460 TO 462/VIZAG/2005 ASSESSMENT YEAR S : 1996 - 97 2000 - 01 2001 - 02 1996 - 97 2000 - 01 & 2001 - 02 RESPECTIVELY DCIT CIRCLE - 1 KAKINADA M/S. KAKINADA CO - OP. TOWN BANK LTD. KAKINADA (APPELLANT) VS. (RESPONDENT) PAN NO. AABFT 2435K APPELLANT BY: SHRI D.S. SUNDER SINGH DR RESPONDENT BY: SHRI G.V.N. HARI CA ORDER PER SHRI S.K. YADAV JUDICIAL MEMBER : - THESE MISCELLANEOUS APPLICATIONS ARE PREFERRED BY THE REVENUE AGAINST THE RESPECTIVE ORDER OF THE TRIBUNAL WITH THE SUBMISSION THAT TRIBUNAL HAS TAKEN A VIEW CONTRARY TO THE VIEW TAKEN BY THE APEX COURT IN THE CASE OF TOTGARS CO - OPERATIVE SALE SOCIETY VS. ITO REPORTED IN 322 ITR 283 (SC) . THEREFORE THE ORDER OF THE TRIBUNAL MAY BE RECALLED AND BE DECIDED AS PER THE LEGAL PROPOSITIONS LAID DOWN BY THE APEX COURT IN THE AFORESAID CASE. IN VIEW OF THE JUDGEMENT OF THE APEX COURT IN THE CASE OF ACIT VS. SAURASHTRA KUTCH STOCK EXCHANGE LTD. 305 ITR 227 (SC) IN WHICH IT HAS BEEN HELD THAT A JUDICIAL DECISION WHICH IS EXPECTED TO BE FOLLOWED BY THE SUBORDINA TE COURTS ACTS RETROSPECTIVELY ON THE PRINCIPLE THAT COURTS DO NOT MAKE LAW T HEY ONLY DISCOVER OR FIND THE CORRECT LAW AND THE OVER RULING OF THE PREVIOUS DECISION IS A DECLARATION THAT TH E SUPPOSED RULE NEVER WAS A LAW NECESSARY RECTIFICATION IS CALLED FOR IN THE ORDER OF THE TRIBUNAL . 2. DURING THE COURSE OF HEARING OF THE M.A. OUR ATTENTION WAS INVITED THAT THE MISCELLANEOUS APPLICATIONS ARE BARRED BY LIMITATION AS THE TRIBUNAL HAS PASSED AN ORDER IN ONE B U NCH OF APPEAL ON 31.7.2006 AND IN SECOND B U NCH OF APPEAL ON 1 ST AUGUST 2006. THE PRESENT MISCELLANEOUS APPLICATIONS 2 WERE FILED ON 1 ST OCTOBER 201 0 I.E. AFTER THE PERIOD OF 4 YEARS FROM THE DATE OF THE ORDER OF THE TRIBUNAL. AS SUCH THESE MISCELLANEOUS APPLICATIONS ARE BARRED BY LIMITATION A S PER SECTION 254(2) OF THE I.T. ACT. THIS LEGAL PROPOSITION WAS CONFRONTED TO THE LD. D.R. AND IN RESPONSE THERETO IT WAS CONTENDED THAT THERE IS A MARGINAL DELAY IN FILING THE MISCELLANEOUS APPLICATIONS. THEREFORE IT SHOULD BE CONDONED AS THE ORDER O F THE TRIBUNAL IS NOT IN CONFORMITY WITH THE LEGAL PROPOSITION LAID DOWN BY THE APEX COURT IN THE CASE OF TOTGARS CO - OPERATIVE SALE SOCIETY VS. ITO (SUPRA). THE LD. COUNSEL FOR THE ASSESSEE ON THE OTHER HAND HAS SUBMITTED THAT AS PER SECTION 254(2) THE TRIBUNAL CAN MAKE A NECESSARY RECTIFICATION IN ITS ORDER AT ANY TIME WITHIN THE 4 YEARS FROM THE DATE OF THE ORDER EITHER SUO - MOTO OR AT THE REQUEST OF PARTIES. BUT IN THE INSTANT CASE THE 4 YEARS HAS ALREADY BEEN E LAPSED AND THE TRIBUNAL HAS LOST ITS JU RISDICTION TO ENTERTAIN THE APPLICATIONS FILED U/S 254(2) OF THE ACT. 3. OUR ATTENTION WAS ALSO INVITED TO THE ORDER OF THE TRIBUNAL IN THE CASE OF POTHINA VENKATA SWAMY VS. DCIT IN M.A. NO.67/VIZAG/2009 DATED 5.7.2010 IN WHICH THE TRIBUNAL HAS TAKEN A VIE W ON THE IDENTICAL ISSUE AFTER MAKING A DETAILED DISCUSSION ON THE SUBJECT. IN THAT CASE THE TRIBUNAL HAS CATEGORICALLY HELD THAT THE APPLICATION FOR RECTIFICATION SHOULD BE FILED WITHIN THE PERIOD OF 4 YEARS FROM THE DATE OF THAT ORDER OF THE TRIBUNAL. THE TRIBUNAL MAY HOWEVER DISPOSE OFF THE MISCELLANEOUS APPLICATION FILED WITHIN THE 4 YEARS AFTER THE PRESCRIBED PERIOD BECAUSE FOR THE LAPSES OF THE TRIBUNAL THE PARTIES MAY NOT SUFFER. 4. HAVING HEARD THE RIVAL SUBMISSIONS AND FROM A CAREFUL PERUSAL OF THE ORDER OF THE TRIBUNAL IN THE INSTANT CASE VIS - - VIS THE MISCELLANEOUS APPLICATIONS AND THE ORDER OF THE TRIBUNAL IN THE CASE OF POTHINA VENKATA SWAMY (SUPRA) AND THE RELEVANT PROVISIONS OF THE ACT WE FIND THAT AS PER SECTION 254(2) AN APPLICATION F OR RECTIFICATION IN THE ORDER OF THE TRIBUNAL IS TO BE FILED WITHIN THE PERIOD OF 4 YEARS FROM THE DATE OF THE ORDER OF THE TRIBUNAL. UNDER THAT PROVISION NO DISCRETION WAS CONFERRED UPON THE TRIBUNAL FOR CONDONATION OF THE DELAY IN FILING OF THE MISCELL ANEOUS APPLICATIONS AS IT WAS DONE IN THE CASE OF FILING A REGULAR APPEAL BEFORE THE TRIBUNAL. WE HAVE ALSO EXAMINED THIS ISSUE IN THE CASE OF POTHINA VENKATA SWAMY (SUPRA) OF WHICH COPY OF THE ORDER IS PLACED ON RECORD FOR PERUSAL AND FROM ITS CAREFUL 3 PE RUSAL WE HAVE NOTICED THAT IDENTICAL ISSUE WAS EXAMINED BY US IN THE LIGHT OF VARIOUS JUDGEMENTS OF THE APEX COURT AND HIGH COURTS AND WE HAVE TAKEN A VIEW THAT THE APPLICATION FOR RECTIFICATION IN THE ORDER OF THE TRIBUNAL IS TO BE FILED WITHIN A PERIOD OF 4 YEARS FROM THE DATE OF THE ORDER OF THE TRIBUNAL. THE RELEVANT OBSERVATION OF THE TRIBUNAL ARE EXTRACTED HEREUNDER: 4. WE HAVE CAREFULLY EXAMINED THE MATERIAL AVAILABLE ON RECORD AND THE JUDGEMENTS REFERRED TO BY THE PARTIES IN THE LIGHT OF RIVAL S UBMISSIONS AND WE FIND THAT ADMITTEDLY THE TRIBUNAL HAS DISPOSED OFF THE APPEAL VIDE ORDER DATED 15.2.2001. AGAINST THIS ORDER ASSESSEE HAS FILED THE MISCELLANEOUS APPLICATION WHICH WAS DISPOSED OFF VIDE ORDER DATED 15.7.2002. THEREAFTER ASSESSEE AGAIN MOVED A MISCELLANEOUS APPLICATION AND THIS APPLICATION WAS DISMISSED VIDE ORDER DATED 14.8.2008 ON THE GROUND THAT THE MISCELLANEOUS APPLICATION WAS FILED ON SIMILAR SET OF FACTS AND EARLIER MISCELLANEOUS APPLICATIONS WERE REJECTED BY THE TRIBUNAL. NOW AG AIN THE ASSESSEE HAS FILED THE MISCELLANEOUS APPLICATION CLAIMING SAME RELIEF THEREIN. THIS APPLICATION WAS FILED AFTER A PERIOD OF 4 YEARS FROM THE DATE OF THE ORDER OF THE TRIBUNAL. DURING THE COURSE OF HEARING THE LD. COUNSEL FOR THE ASSESSEE HAD ADMI TTED THAT THIS APPLICATION IS NOT FILED AGAINST THE ORDER OF THE TRIBUNAL PASSED ON MISCELLANEOUS APPLICATION NO.44 & 45 OF 2004. THEREFORE WE ARE CONFINED WITH THE LEGAL PROPOSITIONS WHETHER THE MISCELLANEOUS APPLICATION CAN BE FILED AFTER A PERIOD OF 4 YEARS FROM THE DATE OF THE ORDER OF THE TRIBUNAL. IN THIS REGARD WE MAY MAKE A REFERENCE TO THE PROVISIONS OF SUB - SECTION 2 OF SECTION 254 OF THE ACT ACCORDING TO WHICH THE MISCELLANEOUS APPLICATION IS TO BE FILED WITHIN A PERIOD OF 4 YEARS. THE LD. C OUNSEL FOR THE ASSESSEE HAS CONTENDED THAT THIS PERIOD OF 4 YEARS IS AVAILABLE TO THE TRIBUNAL IF THE TRIBUNAL INTEND TO RECTIFY ANY MISTAKE APPARENT FROM THE RECORD OF ITS OWN. BUT IN CASE WHERE RECTIFICATION IS SOUGHT BY THE PARTIES NO TIME LIMIT IS PRE SCRIBED. THIS ASPECT WAS EXAMINED BY THE APEX COURT AND VARIOUS HIGH COURTS. 5. IN THE CASE OF SHRI AYYANGAR SPINNING & WEAVING MILLS LTD. VS. CIT (SUPRA) THEIR LORDSHIP OF THE APEX COURT HAVE HELD THAT SECTION 254(2) OF THE I.T. ACT DEALING WITH THE PO WERS OF THE APPELLATE TRIBUNAL TO PASS ORDER OF RECTIFICATION OF MISTAKE IS IN TWO PARTS. THE FIRST PART REFERS TO THE SUO - MOTO EXERCISE OF THE POWER OF RECTIFICATION WHEREAS THE SECOND PART REFERS TO RECTIFICATION AND AMENDMENT ON AN APPLICATION MADE BY THE ASSESSEE OR THE ASSESSING OFFICER POINTING OUT THE MISTAKE IN THE RECORD. WHERE THE APPLICATION FOR RECTIFICATION IS MADE WITHIN 4 YEARS OF THE APPELLATE ORDER OF THE TRIBUNAL THE APPELLATE TRIBUNAL HAS JURISDICTION TO PASS THE ORDER DISPOSING OFF T HE APPLICATION AND CANNOT REJECT THE APPLICATION ON THE GROUND THAT 4 YEARS HAS BEEN ELAPSED. THE RELEVANT OBSERVATION OF THE APEX COURT ARE EXTRACTED HEREUNDER FOR THE SAKE OF REFERENCE: 4 IN THIS CASE WE ARE ONLY CONCERNED WITH THE INTERPRETATION OF S ECTION 254(2) REGARDING THE POWERS OF THE TRIBUNAL IN THE MATTER OF RECTIFICATION OF MISTAKES APPARENT FROM THE RECORD. THIS CONTROVERSY HAS ARISEN BECAUSE ON DECEMBER 9 1996 THE INCOME - TAX APPELLATE TRIBUNAL IN ITA NO.719(MDS)/94 HAD PASSED AN ORDER UP HOLDING THE ORDER OF THE CIT(A) ON COMPUTATION OF INCOME UNDER SECTION 155J OF THE SAID ACT. BY THE SAID ORDER THE INCOME - TAX APPELLATE TRIBUNAL HAD DISMISSED THE APPEAL OF THE ASSESSEE ON THE GROUND THAT THE PROFIT AND LOSS ACCOUNT OF THE ASSESSEE DID N OT REFLECT THE CORRECT PICTURE FOR THE ASSESSMENT YEAR 1989 - 90. ON AUGUST 2 2000 THE ASSESSEE HAD MOVED A MISCELLANEOUS APPLICATION BEARING NO.40/2000 PRAYING FOR RECALL OF THE ORDER DATED DECEMBER 9 1996 BY MAINLY RELYING UPON THE JUDGEMENT OF THE CO URT IN APOLLO TYRES CASE (2002) 255 ITR 273. AT THIS STAGE IT MAY BE NOTED THAT THE MISCELLANEOUS APPLICATION DATED AUGUST 2 2000 WAS FILED WITHIN FOUR YEARS FROM THE DATE OF THE TRIBUNALS ORDER DATED DECEMBER 9 1996. TO COMPLETE THE CHRONOLOGY OF EVENTS IT MAY BE STATED THAT ON JANUARY 31 2003 FOLLOWING THE JUDGEMENT OF THIS COURT IN APOLLO TYRES LIMITED (2002) 255 ITR 273 THE TRIBUNAL ALLOWED THE RECTIFICATION APPLICATION FILED BY THE ASSESSEE AGAINST WHICH THE DEPARTMENT CARRIED THE MATTER IN APPEAL TO THE HIGH COURT UNDER SECTION 260A OF THE INCOME - TAX ACT. BY THE IMPUGNED JUDGEMENT THE HIGH COURT CAME TO THE CONCLUSION THAT UNDER SECTION 254(2) THE TRIBUNAL COULD NOT HAVE ALLOWED RECTIFICATION BEYOND FOUR YEARS. THAT THE TRIBUNAL HAD NO PO WER TO RECTIFY THE MISTAKE AFTER FOUR YEARS WHICH TIME IS SET OUT IN SECTION 254(2) ITSELF FOR PASSING AN ORDER OF RECTIFICATION EITHER SUO MOTU OR ON AN APPLICATION FILED EITHER BY THE ASSESSEE OR BY THE ASSESSING OFFICER. THE HIGH COURT DID NOT GO INTO THE MERITS OF THE CASE. THE HIGH COURT ALLOWED THE APPEAL AND SET ASIDE THE ORDER OF THE TRIBUNAL ONLYON THE GROUND OF LIMITATION. HENCE THIS CIVIL APPEAL BY SPECIAL LEAVE. IN THE LIGHT OF THE ABOVE CONTROVERSY WE SET OUT HEREINBELOW THE PROVISIONS O F SECTION 254(2) OF THE 1961 ACT WHICH READ AS FOLLOWS: THE APPELLATE TRIBUNAL MAY AT ANY TIME WITHIN FOUR YEARS FROM THE DATE OF THE ORDER WITH A VIEW TO RECTIFYING ANY MISTAKE APPARENT FROM THE RECORD AMEND ANY ORDER PASSED BY IT UNDER SUB - SECTION (1) AND SHALL MAKE SUCH AMENDMENT IF THE MISTAKE IS BROUGHT TO ITS NOTICE BY THE ASSESSEE OR THE ASSESSING OFFICER. ANALYSING THE ABOVE PROVISIONS WE ARE OF THE VIEW THAT SECTION 254(2) IS IN TWO PARTS. UNDER THE FIRST PART THE APPELLATE TRIBUNAL MA Y AT ANY TIME WITHIN FOUR YEARS FROM THE DATE OF THE ORDER RECTIFY ANY MISTAKE APPARENT FROM THE RECORD AND AMEND ANY ORDER PASSED BY IT UNDER SUB - SECTION (1). UNDER THE SECOND PART OF SECTION 254(2) THE REFERENCE IS TO THE AMENDMENT OF THE ORDER PASS ED BY THE TRIBUNAL UNDER SUB - SECTION (1) WHEN THE MISTAKE IS 5 BROUGHT TO ITS NOTICE BY THE ASSESSEE OR THE ASSESSING OFFICER. THEREFORE IN SHORT THE FIRST PART OF SECTION 254(2) REFERS TO THE SUO MOTU EXERCISE OF THE POWER OF RECTIFICATION BY THE TRIBUNA L WHEREAS THE SECOND PART REFERS TO RECTIFICATION AND AMENDMENT ON AN APPLICATION BEING MADE BY THE ASSESSING OFFICER OR THE ASSESSEE POINTING OUT THE MISTAKE APPARENT FROM THE RECORD. IN THIS CASE WE ARE CONCERNED WITH THE SECOND PART OF SECTION 254(2). AS STATED ABOVE THE APPLICATION FOR RECTIFICATION WAS MADE WITHIN FOUR YEARS. THE APPLICATION WAS WELL WITHIN FOUR YEARS. IT IS THE TRIBUNAL WHICH TOOK ITS OWN TIME TO DISPOSE OF THE APPLICATION. THEREFORE IN THE CIRCUMSTANCES THE HIGH COURT HAD ER RED IN HOLDING THAT THE APPLICATION COULD NOT HAVE BEEN ENTERTAINED BY THE TRIBUNAL BEYOND FOUR YEARS. IN THIS CONNECTION OUR ATTENTION IS ALSO INVITED TO THE JUDGEMENT OF THE RAJASTHAN HIGH COURT IN THE CASE OF HARSHVARDHAN CHEMICALS AND MINERALS LTD . VS. UNION OF INDIA (2002) 256 ITR 767 WHEREIN AN IDENTICAL CONTROVERSY AROSE FOR DETERMINATION AND THE VIEW TAKEN BY THAT COURT WAS AS FOLLOWS (HEADNOTE): ONCE THE ASSESSEE HAS MOVED THE APPLICATION WITHIN FOUR YEARS FROM THE DATE OF APPEAL THE TRIBU NAL CANNOT REJECT THAT APPLICATION ON THE GROUND THAT FOUR YEARS HAVE LAPSED WHICH INCLUDES THE PERIOD OF PENDENCY OF THE APPLICATION BEFORE THE TRIBUNAL. IF THE ASSESSEE HAS MOVED THE APPLICATION WITHIN FOUR YEARS FROM THE DATE OF THE ORDER THE TRIBUNA L IS BOUND TO DECIDE THE APPLICATION ON THE MERITS AND NOT ON THE GROUND OF LIMITATION. SECTION 254(2) OF THE INCOME - TAX ACT 1961 LAYS DOWN THAT THE APPELLATE TRIBUNAL MAY AT ANY TIME WITHIN FOUR YEARS FROM THE DATE OF THE ORDER RECTIFY THE MISTAKE APPA RENT FROM THE RECORD BUT THAT DOES NOT MEAN THAT IF THE APPLICATION IS MOVED WITHIN THE PERIOD ALLOWED I.E. FOUR YEARS AND REMAINS PENDING BEFORE THE TRIBUNAL AFTER THE EXPIRY OF FOUR YEARS THE TRIBUNAL CAN REJECT THE APPLICATION ON THE GROUND OF LIMIT ATION. WE ARE IN AGREEMENT WITH THE VIEW EXPRESSED BY THE RAJASTHAN HIGH COURT IN THE CASE OF HARSHVARDHAN CHEMICALS AND MINERALS LTD. (2002) 256 ITR 767. 6. WE HAVE ALSO EXAMINED THE OTHER JUDGEMENTS REFERRED TO BY THE PARTIES BUT WE DO NOT FIND ANY WHERE IN ANY OF THE JUDGEMENTS THAT NO TIME LIMIT IS PRESCRIBED FOR THE PARTIES FOR MAKING THE RECTIFICATION APPLICATION TO THE TRIBUNAL SEEKING RECTIFICATION IN THE ORDER OF THE TRIBUNAL. WE THEREFORE FOLLOWING THE JUDGEMENT OF THE APEX COURT ARE OF THE CONSIDERED VIEW THAT THE APPLICATION FOR RECTIFICATION SHOULD BE FILED WITHIN THE PERIOD OF 4 YEARS FROM THE DATE OF ORDER OF THE TRIBUNAL. THE TRIBUNAL MAY HOWEVER DISPOSE OFF THE MISCELLANEOUS APPLICATION FILED WITHIN THE 4 YEARS AFTER THE PRESCRIBED P ERIOD BECAUSE FOR THE LAPSES OF THE TRIBUNAL THE PARTIES MAY NOT SUFFER. 6 5. ADMITTEDLY THESE MISCELLANEOUS APPLICATIONS FOR RECTIFICATIONS ARE FILED AFTER THE 4 YEARS FROM THE DATE OF THE ORDER OF THE TRIBUNAL. THEREFORE FOLLOWING THE AFORESAID ORD ER OF THE TRIBUNAL WE ARE OF THE VIEW THAT THESE MISCELLANEOUS APPLICATIONS ARE BARRED BY LIMITATION AND WE THEREFORE DECLINE TO ADMIT THE SAME. 6. IN THE RESULT THESE MISCELLANEOUS APPLICATIONS OF THE REVENUE ARE DISMISSED BEING BARRED BY LIMITATION. P RONOUNCED IN THE OPEN COURT ON 29.10 .20 10 SD/ - SD/ - (BR BASKARAN) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER VG/SPS VISAKHAPATNAM DATED 29 TH OCTOBER 20 10 COPY TO 1 DCIT CIRCLE - 1 KAKINADA 2 THE KAKINADA CO - OPERATIVE TOWN BANK LIMITED 11 - 3 - 6 VETERINARY HOSPITAL STREET RAMARAO PET KAKINADA - 533 004 3 THE CI T RAJAHMUNDRY 4 THE CIT (A) RAJAHMUNDRY 5 THE DR ITAT VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM

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